A South Korean district court has thrown out security breach charges against former Terraform Labs CEO and co-founder Hyun-seong Shin. The court considered that LUNA (MOON) (the native token of the LUNA ecosystem) as a non-security under the Korean Capital Markets Law.
The Seoul Southern District Court dismissed the prosecution's appeal for confiscating Shin's property and his arrest based on violations of securities law. The prosecution argued that Luna's fraudulent transactions violated the Capital Market Law in addition to property-related crimes (fraud), making property forfeiture possible. reported a local newspaper.
A Google translated version of the court's observation read:
"It is difficult to see Luna Coin as a financial investment product regulated by the Capital Markets Law."
The court, while rejecting the prosecution's request for forfeiture of the defendant's assets, noted that it is difficult to see that the assets that are the subject of the lawsuit are โproperty acquired by a crime or an asset derived from itโ.
The last bug is most notable because it categorically states that Luna is not a value. Other courts have previously used cautious language such as "there is room for dispute in terms of the law" and "it is questionable whether the Capital Market Law can be applied."
The lawyer representing former CEO Shin saying that the court rejected the prosecution's requests for an arrest warrant against former CEO Shin and individuals associated with this case. He added that Luna cannot easily be considered an investment product under the court ruling.
Related: Do Kwon Lawyers Received $7 Million Before Terra Collapse: Report
The latest court ruling makes the Terra-LUNA saga a case of fraud and breach of trust rather than a violation of the Capital Market Law. However, the prosecution is still focusing on the securities aspect of the native token and has also appealed to the Supreme Court against the verdict of the lower district court.
The Korean district court ruling contrasts with that of the United States Securities and Exchange Commission, which has charged Terraform Labs and its founder Do Kwon with violation of securities law. However, Kwon's lawyers have dismissed the SEC's securities fraud allegations.
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